The Maha Pasana Guha (great cave) was built simultaneously with the Kaba Aye Pagoda and is located in the same complex.

[2] As prime minister of Burma, U Nu built the Kaba Aye Pagoda and the Maha Pasana Guha Cave (မဟာပါသာဏလှိုင်ဂူသိမ်တော်ကြီး) in 1952 in preparation for the Sixth Buddhist Synod that he convened and hosted and which lasted two years, from 1954 to 1956.

The construction of the pagoda and cave were a part of U Nu's attempt to establish Buddhism as the official religion of Burma, thereby creating a Buddhist state.

The Kaba Aye Pagoda compound is large and is intended to be peaceful and quiet for the tourists, monks and devotees who visit.

During the sixth Buddhist Synod in 1954, 2500 monks converged on the cave to recite the words of the Buddha in Pali, the entire Tipitaka.

However, in 1962 Ne Win, who succeeded U Nu, repealed this measure and the effort to make Burma a Buddhist country was eventually halted.

The construction of the Kaba Aye complex was part of U Nu's attempt to institutionalize Buddhism at the national level.

[6] On December 25, 1996, two bombs exploded at the Kaba Aye Pagoda and Maha Pasana Cave, killing five people and wounding 17.

However, the second explosion, which detonated two hours later as authorities were looking into the other blast, went off inside the temple as it was filling with pilgrims, causing the fatalities and injuries.

At the Kaba Aye compound Buddha's tooth relic was on display, and thus many more pilgrims were at the site than during normal times.

The tooth relic, on loan from China and believed to be one of two surviving since the Buddha's death 2500 years ago, was not damaged in the bombing.

The SLORC (State Law and Order Restoration Council) accused the All-Burma Students Democratic Front (ABSDF) and the KNU (Karen National Union) of carrying out the bombing.

Thus, it is assumed that it must be the work of the SLORC.”[9] Even before the bombing at the Kaba Aye complex, the Burmese government had been accused of staging disturbances to justify crackdowns that would follow.